PSU-AAUP, MEMBER OPPORTUNITIES, LEGISLATIVE & POLITICAL, HIGHER ED FACULTY, ACADEMIC PROFESSIONALS

PSU’s funding, Kotek’s legacy

December 10, 2025 / PSU-AAUP

Dear colleagues,

I know this finds you in the middle of finals week. We’re all exhausted, and our focus is rightly on our students. But before we turn from this place and leave campus for the break, it’s important to calibrate our sense of the immediate and long-term future of PSU and how we can all be a part of guiding this year’s administrative plans for transformation toward the best possible outcome.

For months, university leadership has justified the "Bridge to the Future 2.0" cuts by citing a bleak fiscal reality. They argued that a massive state deficit and plummeting enrollment left them no choice but to eliminate academic capacity.

That fiscal reality has shifted, and we can choose a better outcome if we have the will and the vision to demand it.

There are many ways to show that the present crisis is one engineered by political and administrative decisions and eminently fixable. Solutions that avoid catastrophic harm are within our grasp, but we have been trapped in an inertia and a defeatism that have led us only toward divestment and cuts. If we are to avoid unnecessary disaster for PSU and public universities in Oregon, it will take our concerted efforts to compel the leadership of the PSU administration, the Board of Trustees, Governor Kotek, and those who hold the Ways and Means purse strings to join us in a committed optimism and accept responsibility for the future prosperity of this city and state.

Among the reasons they should:

1. The State’s Fiscal Crisis Has Changed. Governor Kotek’s administration prepared for 2.5%-5% cuts to solve a projected $373 million state deficit. New revenue forecasts reveal that unexpected corporate tax receipts have reduced that deficit by 83% to just $63 million. The state-level "fiscal cliff" used to justify downstream cuts at PSU has disappeared. The Legislature can further improve the situation by decoupling Oregon’s tax code from the impacts of HR. 1. And the Education Stability Fund sits at over $1 billion, ready for emergency use for a sector that has been driven into catastrophe by decades of divestment. The resources to stabilize this university and Oregon’s other public universities exist in Salem. We urge the Cudd administration to direct its efforts toward lobbying the governor and others for funding outcomes that build the university’s, city’s, and state’s futures and prevent permanent damage to the institution that generates those futures. Through your actions and those of member leaders, PSU-AAUP will continue to push for emergency funding and reform in the state’s funding model for both short and long term relief for PSU and the entire higher education sector. We need to commit ourselves to this effort now in every way we can use our pens, keyboards, and voices.

2. The Revenue Crisis Was Self-Inflicted We are told we must cut programs serving Oregon students because of "market conditions," yet the data shows a specific failure of strategy. In recent years, the university voluntarily dismantled its high-revenue international programs—including Engineering partnerships in China that generated $5 million annually. Overall international enrollment has dropped from ~2,200 to 750. This single administrative failure accounts for a revenue loss larger than our entire current budget gap. Decisions made about internationalism even before Trump’s inauguration have doomed us to the budget gap we now have. To add to this divestment from international students and programs, the administration proposes that we cut Oregonian degree pathways and institutional capacity to make up for it. We urge and can push for a recommitment to both internationalism and opportunity for Oregonians.

3. The "Inefficiency" Narrative is Built on Flawed Data. The administration claims we must cut programs to become efficient, relying on Gray DI metrics to identify PIVOT targets to be sunset. The Faculty Senate has already objected to this data as flawed and unfit for academic decision-making, and has requested substantive changes to data transparency and a comprehensive review of the impact of the 104 FTE already cut last academic year as crucial next steps. Alongside the PSU Faculty Senate in its April no-confidence vote on the Bridge to the Future plan, PSU-AAUP calls on the PSU administration to further mitigate the budget crisis by working with our Contract Bargaining Team to implement effective voluntary FTE reduction and retirement incentive proposals.

As for efficiency, the Higher Education Coordinating Commission (HECC) contradicts the administration’s position, finding that Oregon’s public universities are "not inefficient but structurally underfunded"— the state’s own regulators confirm there is no fat left to trim. Imposing further cuts on a structurally underfunded system destroys the essential capacity required to serve this region. Portland remains the only major metropolitan area in its class without a public university funded to match its population. We operate with a capacity deficit, not a surplus, and in spite of the malaise encouraged by leadership and the challenges of the political climate, there is room to grow, and our efficiency already abounds. Reducing our footprint further abandons the region we are chartered to serve, and it hampers Portland’s recovery. The distributed social costs of these decisions are immense and long-lasting. It is up to all of us to guide the outcome and aim for a flourishing PSU, Portland, and Oregon— rather than a regime of divestment without end.

It is a Question of Priorities. While the administration pleads poverty, they continue to find resources for litigation against their own workforce. On November 6, an independent arbitrator ruled that the university violated our contract by laying off 10 faculty members without following shared governance protocols. The arbitrator ordered their immediate reinstatement. Since then, the university’s legal counsel has indicated it will not honor this binding ruling. The PSU administration is choosing to spend scarce public funds on expensive outside legal counsel to fight a binding decision rather than paying the faculty who teach our students. Once again, we ask the PSU administration to join us in a committed optimism and to use its resources to fight for the future of PSU and the opportunity it represents for Portlanders and Oregonians.

The Alternative: We shouldn’t concede to a managed decline when the solutions are within reach. PSU-AAUP is launching a direct campaign calling on Governor Kotek to Declare a Higher Education Emergency, and we will extend this call to all levels of government for support and allyship in the weeks ahead. We are already working in concert with state higher education labor leaders, and the call for solidarity and the voice we raise will only grow as we move toward the Short Session in February. We are asking Governor Kotek to:

Reject the potentially devastating cuts to HECC and the PUSF.
Unlock the Education Stability Fund to give PSU a $50 million bridge.
Fund a Recovery Plan to invest in well-implemented plans for bolstered recruitment and marketing plans and workforce and employer partnerships, and further innovations in advising, student success, retention, and transfer pathways.

Action Required: We need your signature and RSVPs before you sign off for the break. We must show the Governor, the Board of Trustees, and PSU leadership that faculty and staff of PSU-AAUP refuse to accept a manufactured crisis.

SIGN THE LETTER TO GOVERNOR KOTEK

Demand Governor Kotek use Education Stability Funds to stop the cuts
Attend the January 5th Faculty Senate in Cramer Hall 053. Materials will be posted in advance of the meeting here.
Ask coworkers and students to join you at the January 30th Board of Trustees meeting in ASRC 515. RSVP here
Many of us have deep ties in the community. This is a moment to tell the story of the administration’s disrespect of shared governance, our union contact, and binding arbitration as well as the need for Education Stability Funds to elected officials you know.
Help grow our union's power by joining our organizing, legislative, or comms committee here: https://forms.gle/xsAk2XiuEzsnwLf67
Join PSUFA negotiations Friday RMNC-316 or zoom: (email us for the link) - During PSUFA's last session, PSU Admin proposed to eradicate the Adjunct Financial Assistance Fund entirely

When we return in January, we’ll have to ask hard questions about why our leadership is shrinking the university when the means to save it are within reach and the impacts of the cuts are so devastating for PSU, the city, and the economic and social future of this state.

In solidarity,

Bill Knight
President, PSU-AAUP

See my letter to Governor Kotek and send yours here:

Governor Kotek, Senate President Wagner, Majority Leader Jama, Ways and Means Co-Chair Leiber, Ways and Means Ed. Sub. Co-Chair Sollman, Senate Ed. Committee Chair Frederick, Sen. Neron Mislin, House Education Chair Hudson, Ways and Means Ed. Sub. Co-Chair Ruiz, House Co-Chair Ways and Means Sanchez, Rep. Ben Bowman, Rep. Fahey, Executive Director at Oregon Higher Education Coordinating Commission Ben Cannon,

We urge you to officially recognize that Oregon’s public universities confront a state of emergency that only decisive leadership and action can resolve. Every delay in addressing this crisis does further harm to the state, and stabilizing and reinvesting in a flourishing higher education system will be necessary if Oregon is to face this moment and create the foundation for real future prosperity.

The emergency has been long in coming: decades of conscious policy choices have backed the state into this crisis. By systematically withdrawing support from public higher education to balance state budgets, Oregon has placed itself 46th in the nation for state funding per student for its public universities. The cuts currently modeled by the legislature—up to 5% of our remaining support—will devastate institutions already stripped of their resilience and push us to the absolute bottom of the United States higher education hierarchy. This stark lack of investment undermines the economic future of Oregon and Oregonians, and we must act now to reverse this course before it is too late and before we do further harm to the chance for our state to prosper.

The premise that these cuts are fiscally necessary is false. Recent revenue forecasts indicate that the projected state deficit has largely evaporated, shrinking by 83% due to unexpected corporate tax receipts. The Legislature can further improve the situation by decoupling Oregon’s tax code from the impacts of HR. 1. And the Education Stability Fund sits at over $1 billion, ready for emergency use for a sector that has been driven into catastrophe by decades of divestment. The funds exist. The decision to withhold them is political, and voters are taking notice.

Divesting from higher education reduces the state’s short- and long-term revenue. Recent economic impact reports from our public universities show a return on investment that no other sector can match. For every single dollar the state invests, our major research institutions return between $13 and $15 to the Oregon economy. Portland State University alone generates $1.8 billion annually and, crucially, retains 81% of its graduates in Oregon—the highest retention rate in the system. These institutions function as the state’s primary revenue generators. Backing Oregon away from a 1300% return on investment is wildly irresponsible fiscal malpractice.

Your policy agenda requires a workforce rooted in Oregon. Reliance on imported talent exposes the state to a volatile national market. Secure, long-term economic development arises from the deep integration of university research and industry application. We function as the R&D partners for the state’s most critical sectors. In semiconductor manufacturing, behavioral health, and urban design, our faculty and graduates work alongside industry leaders to co-create the innovations that drive commercial growth. This anchors the return on investment within the state. Because the region retains the vast majority of our graduates, the expertise we cultivate becomes a fixed asset for Oregon’s economy. The engineers, social workers, and planners who will secure your legacy are currently in our classrooms.

The damage is most acute at Portland State University, the state’s only urban research institution. PSU serves a metropolitan area of 2.5 million people, yet it operates at a fraction of the institutional scale found in peer cities like Sacramento, Cincinnati, or Orlando. Simply put, Portland is the only major metro in its class without a public university funded to match its population size. This represents a market failure driven by under-investment.

A shrinking PSU makes the revitalization of downtown Portland impossible. As the largest landowner in the city core, PSU is the anchor tenant of downtown’s economy. If this university contracts, it creates a vacuum that will be filled by blight, undermining every other investment the state makes in the city's recovery. A growing PSU is the engine required to revitalize downtown Portland. A shrinking PSU accelerates its hollowing out and further condemns the city to a persistent downtown malaise.

Your own economists have identified a "K-shaped" economy where high-income earners thrive while working families struggle. PSU and the state’s other public universities provide the primary mechanism for breaking that trajectory. Divesting from higher education traps Oregonians on the downward slope of that K, and Oregon should hope for much better than that.

The choice is managed decline or strategic growth. We offer a clear alternative to managed decline. PSU-AAUP is ready to collaborate with the state, the city, the PSU Board of Trustees, and the university administration to implement a plan to enhance enrollment, rationalize recruitment and marketing, streamline transfer pathways, and deepen workforce connections. The path to solvency is concrete: increasing enrollment by just 1,800 students closes the structural deficit at PSU. In a metro region of 2.5 million, this target is modest and achievable—but we cannot recruit students to a university that is actively cutting its degree programs and walking away from investment in its people and future. The state must focus on a plan to Grow PSU.

Choose a legacy of courage, and be the shield you promised to be. Given the political turbulence of our moment, you have rightly pledged to stand as a "shield" against federal policies that threaten Oregon’s values. The fate of higher education in this state is the test of that shield. The incoming federal administration has made clear its intent to dismantle public education and erode faith in democratic institutions. If Oregon responds to this threat by defunding its own universities, we do the Trump administration’s work for them.

We call on you to use your executive authority to Declare a Higher Education Emergency. This declaration unlocks the Education Stability Fund—a reserve of over $1 billion created by voters for exactly this moment. The statutory conditions for its use are met. Universities are preparing to eliminate essential departments and degree programs. These cuts constitute the structural removal of academic capacity. Once these programs close and the instructional infrastructure dissolves, they will not be rebuilt.

We offer a clear alternative to managed decline. To make this a moment of renewal rather than a Trump victory, we call on you to take two simultaneous, decisive actions securing the state's future:

1. Reject the HECC Cuts System-Wide. The Higher Education Coordinating Commission has been required to model cuts of up to 5% due to outdated revenue projections. We ask you to reject these cuts for all seven public universities in your Governor's Recommended Budget. With the state deficit largely erased by corporate tax receipts, there is no fiscal justification for reducing the baseline funding of higher education. We must maintain Current Service Levels across the entire system to keep our doors open.

2. Unlock the ESF for a "Keystone Investment." The PSU administration’s “Bridge to the Future” plan offers little access to the future it mentions, and you can give Oregon’s universities the keystone necessary to allow them to truly maximize their impact on the state. We need the stability that would allow us to implement our recovery. We ask you to declare a Higher Education Emergency to unlock the Education Stability Fund (ESF) for a multi-year stabilization package.

For the System: We request at least sufficient ESF distribution to stabilize budgets at our sister institutions, ensuring no university is forced into retrenchment.
For PSU Specifically: We request a Biennium Transition Package of $50 million (less than 5% of the fund).
- $36 Million for Stability: To bridge the structural deficit for the full biennium (Year 1 and Year 2). This provides the time required for our strategies to take effect without the chaos of mid-cycle cuts.
- $14 Million for Growth: To fund the Strategic Enrollment & Workforce Initiative—deploying the recruiters, transfer coordinators, marketing, enhanced student success programs, and workforce partnerships required to invite and enroll the 1,800 new students that will make us self-sustaining. We can also renew our commitment to international student recruitment, which under the present administration’s divestment (prior to Trump’s election) saw a drop in enrollment that by itself could cover our budget gap.

Do not let Oregon’s public universities fail. We urge you to declare the emergency. Unlock the funds. Defend the future of this state and its people, and act decisively as the protector of Oregon you promised you would be.

Sincerely,

Bill Knight, President, PSU-AAUP